RESEARCH ARTICLE

Donald KENNEDY, Simon P. PHILBIN

Techno-economic analysis of the adoption of electric vehicles

© Higher Education Press 2019

Abstract Significant advances in battery technology arecreating a viable marketspace for battery poweredpassenger vehicles. Climate change and concerns overreliable supplies of hydrocarbons are aiding in the focus onelectric vehicles. Consumers can be influenced by market-ing and emotion resulting in behaviors that may not be inline with their stated objectives. Although sales of electricvehicles are accelerating, it may not be clear thatpurchasing an electric vehicle is advantageous from aneconomic or environmental perspective. A techno-economic analysis of electric vehicles comparing themagainst hybrids, gasoline and diesel vehicles is presented.The results show that the complexity of electrical powersupply, infrastructure requirements and full life cycleconcerns show that electric vehicles have a place in thefuture but that ongoing improvements will be required forthem to be clearly the best choice for a given situation.

Keywords BEV, battery powered electric vehicle, envir-onmental impact of electric vehicles, techno-economicanalysis, gasoline versus electric powered cars, dieselversus electric cars, consumer behaviour

1 Introduction

Battery powered electric vehicles have been a potentialtransportation choice for at least 180 years (Larson et al.,2014) but they have struggled to gain consumer interest.Technological advances in materials and combustion havecontinuously improved the attractiveness of the gasoline

powered vehicle to maintain it as the clear market choicefor most of the preceding century (Van Wee et al., 2000). Arecent shift has been the commercial introduction of hybridelectric vehicles (hybrids) and plug-in hybrids which bothhave on-board fossil fuel optional power to reduce therequired storage capacity of the batteries. The traditionalchallenges with battery powered electric vehicles center onthe short range of the vehicle between charges along withlong charging times (Kley et al., 2011) preventing wideadoption by the marketplace.Times, however, are changing. In the past decade,

improvements in battery weight and life have increased theviable distance for electric cars and they are now gainingmarket appeal. Climate change and questioning thecontinued reliance on hydrocarbons is providing fertileground for a resurgence in electric cars and is developinginterest in new battery technologies to increase range anddecrease charging times. This is especially the case forautomotive applications where technological advances arebeing sought to reduce local emissions and supportdevelopments such as self-driving and other autonomousoperations. This interest is buoyed by higher costs anduncertain dependability of supply for fossil fuels, and thenegative impact on air quality caused by vehicle traffic(Egbue and Long, 2012).Purchasing a new car is typically the next major capital

expenditure for individuals after housing and the decisionis generally not taken lightly (Bernasek, 2002). However,consumers do not always act in a manner that would followlogical or even deductive reasoning. For instance, whencomparing the costs of renting or owning a home, peopleare found to accept a lower standard when renting thanwhen purchasing, so that renters appear to statistically payless. This may not be the case when comparing similarliving environments, in that owning may then be the lowercost option (Shiller, 2007). Applying this to vehicles,comparing the overall cost or environmental impact of newversus used or fuel type for vehicles is complicated bydriver behavior associated with vehicle choice. A newmore fuel efficient car may be driven more (including forpleasure trips) and therefore be more costly and impact the

Received November 10, 2018; accepted May 27, 2019

Donald KENNEDY (✉)Freerange Buddy Publications, 10723–130 st. NW,Edmonton T5M 0Z1,CanadaE-mail: don@donkennedy.ca

Simon P. PHILBINNathu Puri Institute for Engineering and Enterprise, London South BankUniversity, London SE1 0AA, UK

Front. Eng. Manag.https://doi.org/10.1007/s42524-019-0048-x

environment more than an inefficient vehicle that is seldomused. Furthermore, marketing can be effective in drivingconsumer choices, which may not be fully aligned with theconsumer’s stated objectives. As an example, Bastian et al.(2016) point out that a diesel car may be purchased withthe premise of saving money, but the actual diesel vehiclepurchased by the consumer tends to be larger and 50%more expensive than a gasoline model they wouldotherwise have selected. The increased size and typicallyhigher at the pump fuel cost for the diesel does not justifythe purchase of the diesel vehicle on a cost only basis, andparticularly if the buyer is trading in a functional gasolinepowered vehicle with many remaining years of service. Inaddition, recent revelations of misreported emissions hasgreatly tarnished the diesel car as an environmentallyfriendly alternative (Dadush, 2018).Considering the ubiquitous nature of vehicles and the

important role they play in personal finance, this paperseeks to shed light on the current increasing popularity ofbattery powered electric vehicles and help quantify thebenefits and limitations on these vehicles. The paperexplores the forces driving the increased interest in electricvehicles, the current technology and potential for improve-ments in the storage/use of the energy to power them, thehuman factors that influence decisions on electric vehicles,and finally the challenges and trends in the potential wideadoption of these vehicles. A summary of suggested areasof further research is then presented.

2 Techno-economic analysis (TEA) andframework

There are many interconnected factors that have thepotential to impact the adoption of electric vehicles andthese factors are influenced by both technological andeconomic developments. Therefore, this paper reports onour research that is based on TEA of the primary areascontributing to the adoption of battery powered electricvehicles.TEA is a recognized technique to support the evaluation

of economic feasibility or viability for a specifictechnological development, system, or product. Forinstance, TEA has been used to support the analysis of ahybrid solar-wind power generation system (Yang et al.,2009), biomass-to-liquids production based on gasification(Swanson et al., 2010), and the integration of hydrogenenergy technology for renewable energy-based stand-alonepower systems (Zoulias and Lymberopoulos, 2007).Figure 1 provides a schematic view of the TEA deployed

in this research study, which provides a holistic perspectiveof both the economic and technology related factorsaffecting the adoption of electric vehicles as well asanalysis of data on the worldwide growth of electricvehicles.

3 Environmental considerations

As with many changes in technology and society, progressalong a given path is not generally controlled by anoverseeing authority. There may be changes in preferencethat do not align with the intentions of the users. Theincreased popularity of electric vehicles may be driven byperceptions that do not align with reality. A commonlyheld concept is that electric vehicles are environmentally‘better’ without basing this idea on rigorous data. Thissection examines environmental factors from an in-depthreview of the literature on the subject.The use of plug-in electric vehicles offers a technolo-

gical option to enable substantially lower levels of CO2

emissions compared to combustion engine vehicles,thereby supporting reduced transport emissions withoutrestricting personal car use (Graham-Rowe et al., 2012).That is, battery powered electric vehicles offer a potentialfor zero emission capability depending upon where theyare manufactured and charged. When the electricity storedin the batteries or the energy used in manufacturing isgenerated from burning fossil fuels, the electric vehicleapproach is not an overall zero-emission technologyapplication. There are regions where the charging powercomes from zero-emission sources (after the infrastructureis built) but no currently available vehicle would bemanufactured without using fossil fuels for the compo-nents. Nevertheless, battery powered electric vehicles arebecoming substantially more popular both in developedeconomy countries and emerging economy nations. Theautomotive industry and particularly the consumption ofoil products as fuel has been a major target of criticism bygroups interested in environmental issues (Avci et al.,2014). The focus of the criticism has typically been due tothe emissions as a result of driving the vehicles, as opposedto the entire lifecycle impact including manufacture,delivery and disposal.The Nissan Leaf is generally considered to be the first

fully electric modern production vehicle, released in 2010(Van Haaren, 2011). As with the case of diesel vehicles andas discussed above, the motivation for purchasing anelectric vehicle may not be in alignment with the realized

Fig. 1 TEA framework deployed in this research study.

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outcome. Many consumers have a belief that electricvehicles do not contribute to CO2 emissions (Hofmannet al., 2016). The actual emissions associated with electricvehicles are complex, however, and are highly dependentupon the region in which they are built and driven since thesource of electricity and other energy consumed in theproduct life cycle greatly influences their environmentalimpact. While electric vehicles can achieve zero tailpipeemissions, the environmental life cycle analysis suggeststhat it is not clear whether they create more or lessemissions overall than a gasoline vehicle.As noted earlier, the behavior of consumers is not

always in line with their stated motivations. A review ofconsumers of electric cars in Norway (Klöckner et al.,2013) found that the electric cars purchased were generallyintended by the customer to be used as a second car forshort haul trips and did not contribute to any significantreduction in gasoline consumption by the owner. Themotivation to purchase the electric vehicle may have beento save on gasoline, but the actual outcome does notsupport that intention. Organizations such as the SantaBarbara County Air Pollution Control District implementprograms at various times to fund the decommissioning ofolder cars in order to promote the purchase of new, moreenvironmentally friendly vehicles in their communities(Lucsko, 2014). One benefit of such programs is thereduction of environmental stressors in the geographicalarea where the driving takes place. The increasedemissions associated with the production and distributionof the new vehicles are generally in another jurisdiction.The overall benefit of such programs would, therefore, bedemonstrably higher if it could be shown that the overallnet impact of scrapping the old car and replacing it with anew model resulted in lower net emissions. The net impactof such programs is hampered again by the behavior of theconsumer. The amount of fuel consumed is the product ofthe consumption rate per unit distance and the totaldistance traveled. Much literature refers to the ‘reboundeffect’ (e.g., Ajanovic et al., 2016), whereby new vehicles,and particularly those with increased efficiency and theresulting lower vehicle travel cost per unit distance, havethe effect of increasing the annual distances traveled by theowners and thereby reduce or eliminate any economic orenvironmental benefits of upgrading. This increased trafficalso increases infrastructure impacts due to increased roadmaintenance, congestion and accidents (Gerarden et al.,2017). The above examples are offered to show thatdeductive reasoning used to justify an action may not resultin outcomes in line with the intentions. The Norwegianmay have justified the new electric car purchase on savinggasoline and reducing emissions. The car replacementprogram was intended to improve environmental impacts.The actual outcomes suggest that the results do not matchthe intentions.Another concern for widespread adoption of battery

powered electric vehicles has been the fear of disposal by

abandonment as is currently common with gasolinevehicles. This was particularly noted for lead basedbatteries and the possibility of contaminating soil (e.g.,Socolow and Thomas, 1997). Lithium batteries from hand-held devices have traditionally gone to the landfill. From ageneral perspective the scrapping of the metallic materialsfrom lithium-ion batteries requires the two main classes ofrecycling process, principally physical and chemicalprocessing (Xu et al., 2008). Physical processing mayinvolve pre-treatment processes, namely as skinning,removal of the crust, crushing and sieving as well asseparation of the materials to ensure separation of thecathode materials from any other materials. Thereafter, thecathode materials separated are subjected to a series ofchemical processes to remove the cobalt and other metals.There are clear incentives for recycling lithium-ionbatteries and that this would result in an estimated savingof 50% of natural resources. This is not only from adecreased dependency on mineral ore but is also aconsequence of reduced fossil resource (representing45% reduction) and nuclear energy demand (representing57% reduction) (Dewulf et al., 2010).In terms of adopting recycling technologies, Gaines

(2014) reports that a form of smelting based onpyrometallurgical recycling has been commerciallydeployed. In this process the electrolyte and plastics areburned to supply energy for the smelting, while thevaluable metals are reduced to an alloy composed ofcopper, cobalt, nickel, and iron. Subsequently these metalsare recovered from the alloy via a process of leaching.Moreover, the slag from the process contains lithium,aluminum, silicon, calcium, iron, and any manganese thatis derived from the cathode material. This process isoperating commercially for batteries with cathode materi-als that contain cobalt and nickel, but the process is notviable for newer battery designs, such as those that includemanganese spinel cathodes. To illustrate the commercialcase for this process, Fig. 2 includes the approximate

Fig. 2 Commercial case for recycling metallic materials fromlithium-ion batteries (source of data: Gaines, 2014). Component A= LiCoO2, Component B = LiNi1/3Co1/3Mn1/3O2, Component C =LiMnO2, Component D = LiFePO4. Price of cathode values forComponents A and B are based on average points from a datarange.

Donald KENNEDY et al. Adoption of electric vehicles 3

cathode and elemental constituent financial values. Whenthe cost of the component materials is high compared to thevalue of the cathode (such as with Component A) theviability of recycling is much greater than when thesalvage value compared to the value of the cathode is muchlower (Component D). Recycling of old batteries is easierto support when there is an economic case for doing so.At present, it appears that the environmental impact or

potential societal benefit of using electric vehicles is not asclear as many consumers would believe. Research into lifecycle analysis of large scale adoption of electric vehicles isrequired to better determine if this technology will deliverthe benefits many currently perceive to be there. Thissituation is complicated by the promise of improvedtechnology around the performance of batteries andcharging.

4 Technological challenges and potentialfor advancement

The challenges of battery powered electric vehicleadoption by consumers hinge mainly on the range,charging times, original cost and replacement cost of thebatteries. The literature indicates that costs of batterytechnologies and the corresponding cost of batterypowered electric vehicles are decreasing and this hasbeen associated with technological learning (Weiss et al.,2012). Battery powered electric vehicles are expected toremain more expensive than hybrids. Battery poweredelectric vehicles are also likely to require sustained andmajor levels of investment in research, development anddemonstration for costs to be driven down further(Catenacci et al., 2013). This position is also supportedby a systematic review by Nykvist and Nilsson (2015).This work identified that cost estimates across the industryhave decreased by about 14% from 2007 to 2014,corresponding to a reduction in the cost from above 1000USD/kWh to around 410 USD/kWh for battery storagecapacity. The study also identifies that manufacturersachieved a cost base of around 300 USD/kWh throughannual reductions of 8%. However, Van Vliet et al. (2011)estimate battery powered electric vehicles will not becompetitive with normal combustion engine vehicles untilthis cost drops to 170 USD/kWh. To give this perspective,the Nissan Leaf has a maximum power draw of 110 kWand a battery capacity of 40 kWh. This yields a reserve of22 min at full power and a target battery cost of 6800 USDcompared to the above 2007 cost of 40,000 USD.Consequently, the falling costs of lithium-ion batterypacks pave the way for faster adoption of electric vehiclesthan was previously predicted, and eliminates the environ-mental concerns of lead.Regarding battery types, lithium-ion based technologies

are seen as having the most optimal set of capabilities

across specific energy, specific power, efficiency, cycle life,lifetime, safety and costs (Gerssen-Gondelach and Faaij,2012), although further technological development is stillrequired to achieve commercially robust levels ofperformance across all the areas. Moreover, productionof lithium battery technology largely rests on themanufacture of a graphite anode with a lithium cobaltoxide cathode and a liquid solution of a lithium salt (e.g.,LiPF6) in an organic solvent mixture (Scrosati and Garche,2010).Lithium-ion batteries represent the leading technology

option for electric vehicles offering high energy and powerdensities, but availability of world lithium resources alsoneeds to be considered. While it is estimated that currentusage levels can be readily met, it is possible that as electricvehicles become more widespread, the greater demand forsuch batteries will place severe pressure on lithiumreserves. In terms of lithium products available in themarket, there are a number of mineral and othercommercial forms as depicted in Fig. 3 (Grosjean et al.,2012). This highlights that lithium carbonate (Li2CO3),mineral concentrates and lithium hydroxide (LiOH) are themost common commercial forms of lithium representingapproximately 80% of the market. According to Grosjeanet al. (2012), in 2007 the main applications were inceramics and glass industries with 37% of the market shareversus 20% for batteries. This split of lithium usage willchange as demand for lithium-ion batteries increases.

There is currently extensive research being performedon many aspects of lithium-ion batteries. For example, thisincludes the lithium-ion battery graphite solid electrolyteinterphase (SEI) and the relationship with formationcycling (An et al., 2016) and on interconnected siliconhollow nanospheres for lithium-ion battery anodes inregard to long cycle life (Yao et al., 2011). Indeed suchresearch avenues need to be encouraged and funded inorder to collectively reduce the technological risks oflarge-scale lithium-ion battery use in electric vehicles. Theutility of lithium-ion batteries can also be viewed from a

Fig. 3 Market shares of lithium-based commercial products(source of data: Grosjean et al., 2012).

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broader perspective, for instance, the use of batteries forthe storage of electrical energy generated by renewablessuch as solar or wind power thereby allowing the grid to bestabilized against variable demand for power. Suchapplications will require different energy and powerdensities and corresponding new chemical approaches,such as a cathode of a single host where a singly chargedcation is inserted reversibly and over a finite solid–solutionrange (Goodenough and Park, 2013).As noted above, historically lithium-ion batteries have

been disposed along with general waste in landfill as it hasnot been economically viable to recycle. Recently,technological developments have the potential to supportrecycling batteries in the future. In 2005, 1100 t of heavymetals and more than 200 t of toxic electrolytes wererecovered from 4000 t of used lithium-ion batteries(Ordoñez et al., 2016). The demand for lithium ionbatteries increases with the wider adoption of electricvehicles, so the potential for the contamination of soilincreases without an associated recycling ability. There arecertain challenges associated with recycling lithium-ionbatteries and these are principally the disposal of harmfulwaste as well as avoidance of explosion during wasteprocessing caused by radical oxidation of the lithium metalproduced from battery materials (Xu et al., 2008). Disposalitself needs to include processing of a variety of differentmetallic and chemical compounds as depicted in Fig. 4.The diverse components of lithium ion batteries as shownin Fig. 4, complicates the processes for recycling and actsas an inhibiting factor in encouraging the safe disposal ofelectric vehicle components.

Any successful improvements in technology will berequired to be followed by an acceptance by the consumerto drive a wide adoption of electric vehicles. As with allactivity driven by a consuming public, there is no certaintyon how individuals will respond to a given change in aproduct. The following section outlines some of theconsiderations on the acceptance and use of electricvehicles.

5 Consumer influence on economic andenvironmental factors

The world of management is complex due to theuncertainty of human responses to change. The unintendedconsequences of decisions can result in outcomes greatlydifferent than anticipated. Although electric vehicles havebeen proposed for about as long as steam, gasoline anddiesel vehicles, the predominant choice until very recentlyhas been the gasoline vehicle for personal use. Comparingreal world economic and environmental factors for gaso-line versus electric vehicles is greatly impacted by thechanges in the owner’s purchasing decisions and drivingbehavior.Leard et al. (2017) show that a consumer trend for 2%

heavier vehicles per year, which started around the year1976, has since leveled off in 2004. That is, although thecombustion engine powering vehicles have improvedgreatly since 1972, the actual economic benefit has notbeen realized because the vehicles themselves haveincreased in weight. Greater advances in fuel efficiencyfor gasoline engines since 2004 has been offset however bythe unabated demand for horsepower with an increase ofabout 4%more power per year for the average vehicle soldin the United States (US). Electric vehicles can providebetter acceleration and therefore power consumption thangasoline or diesel vehicles. Therefore, choosing a moreefficient engine or one with lower environmental impactunder constant conditions may not result in any benefit ifthe driver chooses to adjust behaviors to counter thebenefits. Therefore, in the following section we will restrictthe comparison to the choice of assuming the consumerwould view the two vehicle types with the same criteria.That is, we compare the economic and environmentalcharacteristics of gasoline and electric vehicles assumingthe consumer would view them as equivalent transporta-tion tools (equivalent size and power), ignoring thatconsumer choice is not always rational as outlined aboveand may be impacted further by subjective influences. It isassumed that a common situation for consumers is whetherto keep their existing gasoline powered vehicle orexchange it for one that is electric powered. We performedan analysis of the environmental impact and economics ofsuch a case.There are many factors that can greatly impact the

realized fuel economy of a gasoline powered vehicle. Inareas where winters are typically below freezing, fueleconomy is particularly worse during the time required tofully warm the fluid in an automatic shift four-wheel or all-wheel drive vehicle (Jehlik et al., 2015), making thempoorly suited for short haul urban trips. Also, frequentstopping and acceleration decrease the achievable fueleconomy. The optimum fuel economy for gasolinevehicles is at a steady speed down a straight highway.Electric vehicles, however, tend to be more efficient when

Fig. 4 Chemical composition of a typical lithium-ion secondaryrechargeable battery (source of data: Xu et al., 2008).

Donald KENNEDY et al. Adoption of electric vehicles 5

driven in a typical urban environment with short trips. Thisis due to the ability to partially regenerate the kineticenergy back to electric energy during braking (Wu et al.,2015). Thomas et al. (2017) report that the energyconsumption of electric vehicles is impacted more bydriving style than gasoline vehicles. Electric vehiclesbenefit most by a less aggressive driving style (lower ratesof acceleration and deceleration), due to a greaterefficiency at regeneration with smoother operation. Withthe above factors noted, the analysis for this paper usesaverage US Environmental Protection Agency (EPA)energy consumption rates, recognizing that the values areuseful for comparison purposes (particularly betweengasoline vehicles) but may not accurately reflect realizedabsolute energy consumption levels in practical use

(Greene et al., 2017).Representative 2018 vehicles from among traditionally

higher selling models were selected for comparison (Daviset al., 2017). The summary data of the vehicle basemanufacturer’s suggested retail price in California (USA),fuel consumption and weight are presented in Table 1.Larger pickup trucks were not included in the datacollection as they are not tested using the same EPAstandards as cars and light trucks, and there is not aconsistent manner to measure their fuel economy (Lutseyand Sperling, 2005).Figure 5 shows the manufacturer’s suggested retail price

as listed on their websites for the vehicles consideredversus the weight of the vehicle. As noted in Table 1, theweight of the battery packs for the electric and hybrid cars

Table 1 Data on representative vehicles as sourced from vendors’ websites (2018)

Vehicle (2018 model) Energy source Weight (kg) EPA rated fuel consumption (mpg) Manufacturer’s suggested retail price (USD)

Chev Bolt Electric 1420* 110 37,495

Nissan Leaf Electric 1266* 100 30,000

Ford Focus Electric 1354* 107 29,120

Hyundai Ioniq Electric 1120* 136 29,500

Kia Soul Electric 1176* 108 33,950

VW eGolf Electric 1286* 118 30,500

Tesla Model 3 Electric 1354* 123 35,690

Toyota Prius Hybrid 1070* 46 20,630

Honda Accord Hybrid 1470* 47 25,100

Ford Fusion Hybrid 1587* 42 25,390

Toyota Highlander Hybrid 1954* 29 36,670

Chev Malibu Hybrid 1403* 44 28,800

Chrysler Pacifica Hybrid 1964* 32 40,000

Cadillac CT6 Hybrid 1880* 25 75,100

Toyota Tundra Gasoline 2400 17 48,300

Cadillac Escalade Gasoline 2535 17 74,000

Toyota Yaris Gasoline 1081 42 17,460

Nissan Altima Gasoline 1457 26 24,125

Dodge Journey Gasoline 1732 19 24,140

Ford Fiesta Gasoline 1171 30 14,200

Honda Civic Gasoline 1250 36 18,840

Chrysler Pacifica Gasoline 1964 23 27,000

Toyota Highlander Gasoline 1879 24 31,000

KIA Nitro Gasoline 1409 50 23,340

BMW X5 Gasoline 2190 24 59,500

Ram 2500 Gasoline 2866 21 32,545

Chevy Cruze Diesel 1464 35 26,800

Chevy Equinox Diesel 1636 32 31,700

Jaguar XE Diesel 1510 36 37,225

BMW X5 Diesel 2215 29 43,100

Ram 2500 Diesel 3030 23 61,000

* Denotes vehicle weight not including batteries; mpg, EPA miles per gallon equivalent energy consumption as reported by vendor.

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have been subtracted from the analysis. This was done toreflect the cost of the vehicle according to the relativeuseable space. That is, a consumer would prefer having nobattery weight in the vehicle, but may prefer additionalcargo space and hence the perceived size of the vehiclefrom the consumer’s view would not include the densemass of the batteries. The weight of a battery pack isaround 300 kg for battery powered electric vehicles andaround 80 kg for hybrids. The electric vehicles are alllighter than the lightest diesel vehicle. It has been widelyreported (e.g., Levinson, 2016) that in order to meetaverage fuel economy standards manufacturers discountsmaller gasoline vehicles and place a much higher marginon their larger, more popular, vehicles. This may be onefactor responsible for the greater spread of the cost byweight for the heavier vehicles as seen in Fig. 5. Thegasoline vehicles are available in a wider range of sizesand, in general, are lower capital cost than any of the otherfuel type alternatives.As demonstrated in Fig. 5, the cost of a vehicle is

generally correlated to its weight, with diesel and gasolinevehicles being similar on a cost per kilogram basis,especially at the heavier end. As noted, diesel vehicles tendto be heavier and consumers tend to choose larger vehicleswhen they select the diesel alternative. The premise ofbetter efficiency and a financial benefit is overcome byupgrading to a larger vehicle. The large variability in thecost per kilogram supports the idea that vehicle purchasesare not totally driven on a financial basis, as would beexpected. Selecting an electric vehicle comes with arequirement to pay more for the physical amount of vehiclethe consumer receives. Decisions on a cost basis do not,therefore, hold up well to simple generalizations and arevery dependent upon the specific vehicle (i.e., make,

model, and options) being considered.The fuel economy for the gasoline, hybrid and diesel

vehicles are as much impacted by vehicle weight as fueltype as shown in Fig. 6. That is, choosing a smallergasoline vehicle can improve fuel economy to approxi-mately as much a degree as choosing the same originalsized hybrid or diesel vehicle. The electric vehicles are allmuch more efficient than the other types. This is largelydue, however, to the low efficiency of the combustioncycle in the vehicles with conventional engines comparedagainst the much higher efficiency of simply chargingbatteries. That is, when coal or natural gas is combusted togenerate the electricity at a remote site, the inefficiency ofthat energy conversion is not included in the mgpemeasured for electric vehicles (Noori et al., 2015). Indeed,from a lifecycle analysis of the environmental impactperspective, the electric vehicle fuel consumption includ-ing the generation of the electricity may be more similar togasoline vehicles depending on the source of energy used.In terms of the environmental impact of producing a

vehicle, Ellingsen et al. (2016) provide data suggesting thatthe energy required to manufacture a vehicle is equivalentto driving about 30,000 miles and the energy to create abattery for an electric vehicle is equivalent to driving anadditional 15,000 miles. Therefore, scrapping a functionalgasoline vehicle for an electric one will create animmediate increased environmental impact with a potentialbenefit only realized a number of years into the future.Again, the environmental impact of the electric vehicleappears much lower in Fig. 6, but again we note that theenergy required to produce the electricity at a remotelocation is not included in these figures. The environmentalimpact of charging a car using nuclear, wind or hydroproduced electricity will be much different than if the

Fig. 5 Retail cost of vehicle by fuel type.

Donald KENNEDY et al. Adoption of electric vehicles 7

source is coal, natural gas or diesel.To make a decision on economics, one, of course, cannot

only consider the purchase price. To evaluate the overallcost of the various vehicle types, a lifecycle analysis isrequired. This is provided in the next section.

6 Lifecycle cost comparisons

As noted earlier, consumer decisions are not alwaysrational from an economic perspective, even when theconsumer may believe they are doing it. The environ-mental impact of vehicles is not simply determined by theamount of tailpipe emissions per kilometre driven. As alsonoted, human factors influence total effects, such asincreased driving when the perception of lower impact isbelieved. Similarly, the overall cost of driving a vehicle isnot only determined by the initial purchase price and thenormalized fuel economy per kilometre. This section looksfurther into the lifecycle cost of the various vehicle typesbeing considered.To compare the cost of driving different vehicle types,

the costs were broken into an annualized capital cost, fuelcost and special maintenance costs. For comparisonpurposes, it was assumed that the maintenance costs,such as tire wear, repairs and preventative work would becomparable for all vehicles and were not included. Forelectric vehicles, however, it has been noted (e.g.,Neubauer et al., 2015) that the batteries have a shorterlife than the vehicle in general, and an expected cost ofaround 1100 USD per year should be associated with theirreplacement. Because of a much smaller electric capacity,battery pack replacement in hybrids would be around 200USD per year. A personal vehicle is driven about 11,000

miles on average in the US (Cirillo et al., 2017). It must beagain noted that people change their habits depending onvehicle choices which makes direct comparisons difficult.Neumann et al. (2015) found that drivers of electricvehicles change their driving behavior over time as theybecome more aware of strategies to increase efficiency andextend the distances that can be attained on a single charge.The time needed to charge and the lower availabilitycompared to gasoline vending stations creates a motivationfor the electric vehicle driver to conserve energy more thana gasoline vehicle driver.To provide a common ground for performing the

analysis, certain assumptions were made to compare thedifferent vehicle types. The following assumptions wereselected for our comparison:� 10% of the purchase price was taken as the annualized

capital cost of the vehicle.� Since the capital cost and fuel economy trend

according to vehicle weight, a normalized value wasused assuming a vehicle weight of 1300 kg, whichrepresents the average for the electric vehicles selected.� Electricity cost of 13 cents/kWh (Burke and

Abayasekara, 2018).� Gasoline 2.70 USD per gallon.� Diesel 2.90 USD per gallon (Goncharuk et al., 2018).The annual normalized driving cost for each vehicle type

is shown in Fig. 7.The perception that electric vehicles provide the

consumer with a lower cost alternative to conventionalgasoline fueled cars is not supported by Fig. 7. As notedthroughout this paper, consumer choice is often driven bypreferences not in line with a purely economic rationale.Factors such as style, performance, and marketingmotivate people to buy certain models, which do not

Fig. 6 Fuel economy by weight and fuel type.

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support any economic basis for the purchase. Theconsumer preference for less fuel efficient gasolinevehicles motivates the vendors to increase the margin onthe popular larger vehicles to subsidize smaller vehicles toreach an acceptable market price in order to meet mandatedefficiency targets. Figure 7 demonstrates that choosing asmall gasoline vehicle is the best economic choice in thecurrent pricing environment. Regional variations in taxes,electricity prices, and fuel prices can potentially change theresults as presented. However, it would be unlikely thatdifferences would be substantial to change the generalconclusion supported here that vehicle size has a greaterimpact on overall cost of driving than the source of energy.Given that the total cost of ownership is dependent upon

many local variables specific to each situation, providingequations to reflect average situations may be misleading.Government taxes or incentives, local power costs, localfuel costs, manufacturer’s incentives or general pricingpolicies, and variations of all of these factors over time

would make simple general formulas more misleading thaninformative. These comparisons are also dependent uponfuture adoption trends and degree of infrastructuredevelopment, which are examined in the next section.

7 Trends, challenges, and outlooks

A key determinant impacting the adoption of electricvehicles is the availability of charger points, both in termsof the number of chargers as well as the relative geographicdistribution especially in more populated areas. The use ofchargers presents its own challenge in terms of the impacton the power distribution grid regarding power losses andvoltage deviations, where uncoordinated power consump-tion can potentially lead to certain grid problems (Clement-Nyns et al., 2010). The actual chargers are classified asslow chargers and fast chargers with different chargeschemes. Related factors to be considered include infra-structure requirements and grid impacts, the role ofconnectors, charger/vehicle communications, time-of-useelectricity costs, and grid upgrades/synergies (Botsfordand Szczepanek, 2009). Additionally, there are variousmaterials considerations to be addressed, including devel-oping the next generation electrodes (anode and cathode)and electrolyte materials for these energy storage applica-tions (Manthiram, 2011).Regarding availability of electrical charger stock for

electrical vehicles worldwide, we can see that the numberof slow and fast chargers has grown dramatically from3682 and 373 in 2010 to 212,394 and 109,871 in 2016respectively (International Energy Agency, 2018). Thisgrowth is depicted in Fig. 8. Application of polynomialregression analysis (order = 2) to this data further high-lights that the number of slow chargers and fast chargers isexpected to reach 600,000 units (R2 = 0.9936) and 400,000units (R2 = 0.8845) in 2020, respectively. The R2

Fig. 7 Annual cost normalized for 1300 kg vehicle.

Fig. 8 Worldwide growth in publicly accessible chargers (slow and fast), source of data: International Energy Agency (2018).

Donald KENNEDY et al. Adoption of electric vehicles 9

(coefficient of determination) values indicate that there isgreater confidence in the projected data for slow chargersthan fast chargers. Although these are estimated figuresbased on trend-line analysis, it can clearly be observed thatthe number of chargers is expected to significantly increaseover the next few years; this greater availability of chargerswill further underpin the expected growth in electricvehicles.On the matter of the registration growth in both battery

electric vehicles and plug-in hybrid electric vehicles, wecan consider the level of worldwide new car registrations(International Energy Agency, 2018). Figure 9 highlightsthe number of electric car new registrations, showing thenumber for battery vehicles has risen dramatically from2010 to 2016.Application of polynomial regression analysis (order =

2) to this data further highlights that the number ofregistrations is expected to reach 1.3 million (R2 = 0.9963)for battery, 0.7 million (R2 = 0.9933) for plug-in hybrid and2 million (R2 = 0.9972) total in 2020. These projections areestimates although the R2 (coefficient of determination)values indicate a good level of confidence in the projecteddata. This analysis would appear to indicate that thenumber of new battery electric vehicle registrations willcontinue to outstrip new plug-in hybrid vehicle registra-tions.

8 Discussion and summary remarks

Environmental issues and the spectre of diminishing fossilfuel reserves have sparked interest in challenging thetraditional methods of transportation. A personal vehiclefuelled by relatively inexpensive gasoline may not be theoptimal means to move people. This paper has attempted to

provide an analysis of the increasing popularity of electricvehicles in consumer choice and public policies.� While electric vehicles are nothing new, they are

gaining traction although the increased popularity is notalways driven by rational analysis.As described in the introduction, electric vehicles have

been technically possible for about as long as gasolinevehicles have been around. Only in recent decades hasthere been solid consumer interest. A common modernperception is that electric vehicles are cheaper to operateand better for the environment but this is not conclusivelysupported by the findings above.� ATEA was chosen to investigate electric vehicle

adoption.� Tailpipe emissions do not measure full environmental

impacts.Section 3 outlined the complicating factors on the

environmental effects of the various types of vehiclesavailable. Human factors that cannot be reliably predictedfor any given situation can produce impacts not intendedby the user. When intentions appear to drive consumerchoices, the result can be opposite to those intentions.� Technological advances create complexity.The increased use of batteries for powering transporta-

tion can impact infrastructure requirements and change thecost of commodities in a difficult to predict direction.Supply of raw materials may also create changes in generalmarket pricing which influences the accuracy of presentdecisions.� A potential unintended consequence of widespread

electric vehicle use could be land contamination ifrecycling of batteries is not economically sustainable.Section 4 outlined that there is good potential for

technological improvements to significantly change thegeneral results of the analysis for a situation in the near

Fig. 9 Worldwide growth in electric car new registrations in thousands (source of data: International Energy Agency, 2018).

10 Front. Eng. Manag.

future, considering predictions two decades ago that noviable replacement would exist now for lead batteries. Pastadvances do not guarantee that significant improvementscan be made, considering the restraints of chemical andphysical reality. The behavior of humans further compli-cates intentions by the trend for increased driving of new ormore efficient vehicles that negates the reductions perdistance traveled. If consumers are purchasing batterypowered electric vehicles specifically for their short trips, itmay be more beneficial to educate and encourage the use ofpublic transportation, walking or biking. The operationalsavings and decreased emissions resulting from simplychoosing a smaller vehicle for personal use and reducingdriving distances will be similar to switching to batterypowered electric vehicles.� A straight forward general guiding principle is not

likely to be supported by reality.� The data suggests a small gasoline vehicle is presently

the best economic choice although this may change atsome point in the future.Sections 5 and 6 showed that the range of vehicles

presently available, including their purchase price, com-plicate the factors that could lead to definitive guidingprinciples. But based on the present data as collected, itappears that keeping a fully functional gasoline vehicle hasa better immediate environmental impact than the emis-sions required for manufacture and distribution of a moreefficient battery powered electric vehicle.

� Trends and changes may require new analyses.Section 7 highlights how increased use of electric cars

will place higher demands on domestic electricitydistribution systems where increased levels of electricvehicle use could result in a situation where suchdistribution capacities are exceeded. This points to theneed for systemic level modeling of overall electric andpower networks as well as potential unintended con-sequences of adopting perceived cleaner road transportvehicles.This study did not investigate the benefits of autono-

mous (driverless) vehicles, which are closely associatedwith battery powered electric vehicle technology. Ifimproved safety is clearly demonstrated by machinecontrolled electric powered vehicles, it is foreseeable thatthe future of hydrocarbon powered vehicles may be phasedout sooner than most people would believe. But this studysuggests that we are not at that point yet.

9 R&D agenda for the adoption of electricvehicles

This research study has enabled synthesis of a set ofproposed research and development (R&D) areas (Table 2)which should be investigated to adequately address theissues highlighted in this TEA on the adoption of electricvehicles.

Table 2 Proposed research and development areas for the adoption of electric vehicles

Area of consideration Proposed research and development areas

Environmental considerations � Life-cycle analysis (LCA) for electric vehicles, which examines the impact of electrical generation viaalternative means, such as from burning of different types of fossil fuels (namely coal and natural gas), bio-organicwaste as well as from renewable sources� Cost-benefit analysis on vehicle scrappage schemes and the impact on consumer behaviors and electric vehiclesales� Improved techniques for recycling different materials from lithium-ion based batteries utilized in electricvehicles to improve the sustainable production of battery materials

Technological advances � Further development of technologies to enable a reduction of the costs associated with large-scale production oflithium-ion batteries� Further development of technologies to reduce the weight of batteries (for both lithium-ion and other types) forelectric vehicles� Understanding lithium-ion battery technology maturity using the S curve model in order to identify the currentlevel of maturity and future trajectories for the technology� Understanding the technological and economic risks arising from large scale lithium-ion battery productionacross the automotive sector and the resultant impact on levels of the commercial sources of lithium

Consumer influence on economic andenvironmental factors

� Further benchmarking analysis of automobiles to understand the impact of different driving situations (i.e.,different driving styles and weather conditions) on realized fuel efficiencies

Lifecycle cost comparisons � Economic analysis on lifecycle costs for electric vehicles to take account of the impact of certain contributingfactors, such as regional variations in taxes, electricity prices, and fuel prices. Discounted cash-flow techniques tobe employed where possible

Electric vehicle infrastructure-batterychargers

� Development of improved battery charger technologies that enable faster charging times� Economic modeling to examine alternative business models to support large scale roll-outs of electrical vehiclecharging infrastructure. Economic analysis to examine potential options for joint public/private sector investmentstrategies to be deployed to address the significant capital needs of such initiatives

Registrations of electric vehicles � International benchmarking studies on the adoption rates for electric vehicles to examine the impact of localfactors as well as cultural influences on the transition rates to electric vehicles in different countries and regions

Donald KENNEDY et al. Adoption of electric vehicles 11

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